ADVERTISEMENT

Germany could be the surprise victim of Trump's trade war

BMW and Mercedes' parent company is the biggest exporter of cars from the USA, and would be badly hit by a Chinese import tax on American cars.

  • Trade tensions between the US and China increase again as Trump proposes tariffs on $100 billion extra of goods.
  • A trade war would hit the USA and China, but German firms are worried.
  • BMW and Mercedes' parent company is the biggest exporter of cars from the USA, and would be badly hit by a Chinese import tax on American cars.
ADVERTISEMENT

LONDON — The escalating battle between the USA and China has German industry is worried that it could get caught in the crossfire, and suffer serious collateral damage.

Global trade tensions increased once again late on Thursday as President Trump mooted the idea of tariffs on $100 billion more of goods, just days after announcing the list of products that will be subject to initial tariffs.

The White House said in a statement on Thursday that Trump looking to add an additional $100 billion in tariffs targeting Chinese goods. That development followsTrump's earlier pitch for $50 billion in tariffson Chinese products. Total tariffs could now impact up to $150 billion of goods.

ADVERTISEMENT

"In light of China's unfair retaliation, I have instructed the [US Trade Representative] to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products under which to impose such tariffs," the statement read in part.

The USA-China skirmish will inevitably have the biggest impact on the two nations directly involved, but there are now concerns among German companies and businesspeople that the tariffs could have a more widespread impact.

"If you hurt trade flows, then Germany will be hurt."

Many German firms, particularly automakers and producers of other forms of heavy machinery have supply chains and manufacturing processes that heavily involve both China and the USA.

ADVERTISEMENT

As an example, both BMW and Mercedes have major operations in the USA, with BMW's plant in Spartanburg, South Carolina producing almost 2,000 cars per day. Mercedes has a major operation near Tuscaloosa, Alabama, employing upwards of 4,000 people.

In the event that China levies an import tariff on cars manufactured in the USA, it would have a major negative impact on the overall business of Daimler, the parent company of BMW and Mercedes. One

Such fears come at a difficult time for German industry, as the so-called "Euroboom" that has boosted economies across the single currency area in the past 18 months shows signs of slowing down.

Friday saw the latest industrial production figures for Europe's biggest economy released, and they made fairly bleak reading.

Having been expected to increase by 0.2% in February, production dropped 1.6% on a month-to-month basis. while on an annual basis, the figure was a fall of 2.6%, down from a rise of 6.6% in January.

FOLLOW BUSINESS INSIDER AFRICA

Unblock notifications in browser settings.
ADVERTISEMENT

Recommended articles

After months of exchanging blows, Kenya and Uganda takes steps towards resolution

After months of exchanging blows, Kenya and Uganda takes steps towards resolution

Africa's first black billionaire could join $2.9 billion Vivendi bid for MultiChoice

Africa's first black billionaire could join $2.9 billion Vivendi bid for MultiChoice

10 most dangerous African countries in 2024

10 most dangerous African countries in 2024

Russia’s nuclear influence expands further north of Africa

Russia’s nuclear influence expands further north of Africa

Navigating the future: How AI transforms selling on Amazon

Navigating the future: How AI transforms selling on Amazon

Wall decor tips: Transforming your space with style and creativity

Wall decor tips: Transforming your space with style and creativity

Putin's African diplomacy: Security talks with West, Central Africa take centre stage

Putin's African diplomacy: Security talks with West, Central Africa take centre stage

Infinix users get over 35% exclusive discount on Showmax premier league & general entertainment subscription

Infinix users get over 35% exclusive discount on Showmax premier league & general entertainment subscription

10 longest bridges in Africa

10 longest bridges in Africa

ADVERTISEMENT